BFIs told to halt loan recovery till mid-April

Kathmandu, March 25

As immediate relief to the coronavirus-hit businesses in the country, the government has set a moratorium on principle and interest payments till mid-April.

A meeting of the Financial Sector Management and Coordination Committee led by Finance Minister Yubaraj Khatiwada today directed banks and financial institutions, as well as non-banking institutions, to halt the collection of principle and interest on loan disbursed in sectors hit by the coronavirus.

However, the government has not defined the sectors hit by the virus.

As businesses across the country, especially ones related to tourism, have been on complete halt due to measures adopted to halt coronavirus transmission, the moratorium on principle and interest payments is expected to give them short-term relief.

Similarly, the committee has also directed Nepal Rastra Bank to temporarily halt the process of provisioning loans issued by BFIs.

The meeting also asked the central bank and banks to ensure that banknotes issued from different counters of banks were disinfected.

In a bid to ensure that the market does not face liquidity problem, the meeting also asked the Ministry of Finance to gradually boost pending disbursements and directed the central bank to promote and prioritise its refinancing fund among banks and financial institutions.